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Perry Proposes Returning Excess Taxes

AUSTIN (AP) – Gov. Rick Perry will use his State of the State address to call for amending the Texas Constitution to allow the state to return tax money it collects but doesn’t spend back to its citizens, according to an excerpt of the speech released to The Associated Press.

Perry, who is scheduled to deliver the speech Tuesday morning to a joint session of the Legislature, will tell lawmakers that he has “never bought into the notion that if you collect more, you need to spend more.”

“Today, I’m calling for a mechanism to be put in place so when we do bring in more than we need, we’ll have the option of returning tax money directly to the people who paid it,” the governor plans to say. “Currently, that’s not something our constitution allows. We need to fix that.”

The Republican has for weeks called on the Legislature to cut taxes and continue to hold down government spending — even though Texas’ economy is booming. He’ll also use the speech to give a specific dollar amount he’d like to see in tax reductions.

Proposing a constitutional amendment requires two-thirds support of both the Texas House and Senate, and it then must be approved by a majority of voters. Republicans control both chambers of the Legislature but would need Democrats to get two-thirds support — something that seems highly unlikely.

While he has made cutting taxes his chief mantra since lawmakers headed back into session on Jan. 8, calls to limit government spending are nothing new for Perry. Last April, he unveiled a “budget compact” that proposed a constitutional amendment limiting state spending increases to only enough to cover the cost of population growth and inflation. That issue hasn’t yet been taken up the Legislature.

Tuesday marks the seventh time Perry has given the State of the State since taking over for George W. Bush as governor in December 2000. Two years ago, he declared there would be “no sacred cows” immune to deep budget cuts as the state struggled with a $27 billion budget deficit amid an economy still feeling the effects of The Great Recession.

The economic picture has since brightened substantially, with sales tax receipts up, unemployment down and the oil and gas industry humming. Yet early draft budgets proposed in the Texas House and Senate were so austere that they would leave about $5.5 billion in projected state revenue unspent and do nothing to restore the 2011 cuts.

Perry has also said he’d support tapping the state’s cash reserve, or Rainy Day Fund, to pay for water infrastructure projects — given that Texas continues to grapple with frequent, punishing droughts. The fund has a projected balance of $12 billion, and proposals being considered by the Legislature would use up to $2 billion of that on meeting the state’s future water needs.

One thing Perry is not expected to say during his address is if he will seek a fourth full term as governor. Perry has held his post longer than anyone in Texas history and is also the longest-serving governor in the country, but he says he won’t announce his plans until this summer.

That’s a world of difference from his 2011 State of the State, when Perry was looking to position himself for a presidential run. He entered the contest for the Republican nomination in August 2011 and immediately became the front-runner. But his campaign flamed out nearly as quickly amid a series of public gaffes that made the governor a national punch-line.

Perry also hasn’t ruled out another try at the White House in 2016, though it’s unclear if his running for governor again would help or hurt such a bid.